PSE&G users can weigh in on how much utility can recoup from Sandy expenses

An undated file photo of a PSE&G van arriving in Montclair before the full wrath of Hurricane Sandy was unleashed on Essex County.

Two years after Superstorm Sandy devastated New Jersey, electricity users have a chance to weigh in on whether they should pay back the state's largest utility for $240.5 million spent recovering from the onslaught, as well as four other storm that knocked out power for up to two weeks at a time.

In public hearings beginning Monday in Hackensack, state regulators will take comments on whether Public Service Electric & Gas spent the money properly and should be allowed to raise bills to recoup expenses for repairing damage caused by Sandy, Hurricane Irene and other storms from 2010 through 2012.

The money - a majority stemming from the October 2012 superstorm - is part of about $364 million the company could ultimately seek from customers, including $261 million for work crews brought in from 26 states and Canada, $41 million for damaged tree removal, $17 million for worker food and lodging and even $1.8 million for water and ice.

If the state Board of Public Utilities approves the spending, customer bills would not immediately change. PSE&G would have to file a separate request with the BPU to raise rates, which would be subject to further hearings.

Still, the upcoming discussions mark another key step in the extended process of determining how utility companies can recover the costs of major-storm repairs and how to curtail future weather-related power outages.

The discussions follow the BPU's approval in May of $1.2 billion in future upgrades designed to improve PSE&G's power distribution system. PSE&G has said rate increases needed to pay for that program will be negated by other charges coming off customers' bills.

The first PSE&G issue "was about investment in hardening the infrastructure to withstand future storms. This matter is about costs associated with recovery from past storms," said BPU spokesman Greg Reinert. The board also recently approved, or is considering, rate hikes to pay for storm recovery by North Jersey's other major utility companies, Rockland Electric Co. and Jersey Central Power & Light.

The PSE&G hearings are set to begin Monday at 3:30 p.m. and 5:30 p.m. in the Bergen County office building in Hackensack, followed by additional forums Tuesday in New Brunswick and Thursday in Mount Holly.

The spending under review works out to an average of about $170 for each of the company's 2.1 million customers, including about 600,000 in Bergen and Passaic counties.

Yet the potential for additional rate increases has generated little of the uproar that followed Sandy, when angry customers railed against utility companies for how long it took to restore power, or the strong reaction to the company's Energy Strong improvement program, both for and against. That proposal began as a $2.6 billion, five-year upgrade package before it was trimmed in negotiations with regulators and others.

Indeed, a key player in the regulation process said she expected all or most of the storm-related expenses to be approved.

"Absent something of tremendous substance that is raised at the public hearings, it's likely it will get approved, or it's at least likely we will sign off on it," said Stefanie Brand, director of a state agency that advocates for consumers, the Division of Rate Counsel. She said her office was reviewing the expenses, but did not expect to raise significant objections.

"The issue is: did they spend this money legitimately or not, and it's actually a fairly simple case," she said.

PSE&G spokesman Paul Rosengren declined to estimate how much rates could rise, saying that would be outlined when PSE&G seeks a rate hike. He said the amount PSE&G would recover may get reduced if the company prevails in pending lawsuits over insurance claims. But he defended the cost of the repairs as proper and efficient under extreme circumstances.

The expenses included wages for PSE&G workers and contractors who restored power resulting from damage to about 64,400 trees; 4,500 poles; 29,000 utility lines connected to homes, businesses and other users; 8,800 other power lines; and 2,200 transformers. Along with Sandy and Irene, the storms under review include a blizzard and Nor'easter in February and March 2010 and a snowstorm in October 2011.

"Obviously, there is a limit to what people want to pay on their bills," Rosengren said. But, he added "during middle of a storm, we shouldn't be second-guessing ourselves about what right for reliability and safety, and trying to scrimp on the costs."

Tempest-tossed

A sampling of expenses Public Service Gas and Electric says it incurred repairing damage after three of the major storms from 2010 through 2012: